Backstory for how VIP came to life
We knew that we basically had the technological infrastructure to make the appchain deployment simple and the ui/x pieces that would allow users to seamlessly interact with applications living on separate chains without weird disconnecting experiences - it was like switching between dapps = switching between apps on your iphone
However, there was always one question in the back of my mind: "Why should anyone care to be part of the broader ecosystem?" When you're pushing applications to spin up their own chain and providing full customizability in the interwoven stack, it's natural to assume that the product will eventually be tied to its own native token and have value tied to it, whether it be as a gas token or some other utility (as it rightly should!).
So the first thought I had was "Let's give the end users the L1 token somehow." When you hold an thing that represents your stake in an system, you probably will care more about it than if you don't hold the thing.
Sounds good so far. Well now you probably want to figure out a mechanism to get it into the hands of "valuable" users. The key insight is to realize that as much as the L1 (governance) can try to gauge the value of a user or a specific action, it will likely never be more informed than the team and community that built the product! Nice - so we let the teams decide the core KPIs, turn that into a measurable "score", and have the L1 allocate incentives linearly based on this metric.
This is great, but what's the benefit to the L1? How can stakers who are committed to the security of the ecosystem (and in some sense, sharing the protocol rewards with users) be incentivized to keep VIP running? Well, we introduce both the weight and balance pools that determine the total VIP incentives an L2 receives. With the gauge voting on the weight pool, L1 governance power and voting is economically valuable. We've seen these types of mechanism elegantly play out for both Curve and Aerodrome-like voting systems. The balance pool in turn puts significance on having INIT on each of the L2s. Given the huge problem space for each "category" of product, these communities are best equipped to drive innovation around integrating INIT into their product. Why not leave the question of incorporating the L1 asset in their hands? Moreover, the weight and balance pools give us two levers for different stages of growth. In the early days, we want to spur growth, so we focus on the growth of mindshare through having a larger gauge weight pool. As the ecosystem starts to populate, the protocol has an option to focus on longer term growth by shifting incentivization towards innovation around L1 asset integration and increasing the buy-in of each L2 product community.
Few other additional bells and whistles...
The builders are also what made the ecosystem growth possible; let's incorporate a model we've seen before to reward them. Can you guess the simple model? It's equivalent to the commissions given to validators! We can introduce an operator commission rate, so that product teams are directly incentivized to bring as much innovation and growth (and incentives!) to their own users. This is great because they are now directly incentivized to build an awesome project as well as maintain the level of quality and innovation over time.
There's also a few edge cases such as having one larger operator dominating the VIP incentives or bad actors, so the L1 governance is able to ensure fair behavior through max reward parameters (ex. maximum % of rewards received by one L2 can be capped if necessary) and has white/blacklist capacities for L2s in the VIP set.
ok so who wants to hear the origin story of Initia VIP